Insurance for Federal Agents – Do you have enough insurance protection?
Risk Management – aka, insurance – is a key vital sign to measure. In our view, insurance is income replacement should something unfortunate happen to you. Having the right type and amount is critical to retirement planning. Insurance for Federal Agents helps to keep your retirement plan bullet-proof. Build up all the wealth in the world if you must, but don’t forget to protect it.
What is it?
Insurance Rate (Ir) measures how much insurance you have compared to how much you might need based on factors like spending, income, and net worth.
Life Insurance Example please:
Let’s get a little more hands on with a video:
Insurance Rate (Ir) is critical
Insurance Rate is an average of all the individual scores for the “big” areas of risk management – Life Insurance, Disability Insurance and Liability Insurance.
The average of multiple individual insurance rates doesn’t produce a meaningful score on its own for the outside world. However, within our community of Federal Agents, it starts to have a powerful meaning for measuring risk. In other words, a 55% Insurance Rate may not mean much to your neighbor. But to our Federal Agent community, it does accomplish some key principles of an Elements score:
- The Insurance Rate calculation is simple for our community. This means less jargon (in this case, it’s as simple as a derivative calculation can be). For example, you could ask, “What’s my Insurance Rate Charlie?” Answer: “It’s your average coverage rate for Life, Disability, and Liability insurance.” The underlying calcs will ultimately need to be explained and explored together, but on the surface, it’s simple and intuitive. The higher the score, the more secure.
- The Insurance Rate is objective. As a straight average of underlying scores, there’s no subjectivity in the overall score. Yes, the underlying insurance needs calculations require subjectivity to determine “needs” (this is unavoidable). However, our assumptions are very simple, conservative, and limited in number. This calculation is as objective as it can be.
- It serves as a meaningful backdrop to a conversation. The score reacts to your current financial data. It indicates your current insurance coverage health. Yes, the number itself is less standardizable than, say, Total Term or Savings Rate. However, it ultimately prompts us to have a great general conversation around Insurance, which is otherwise a complicated topic that has all sorts of nuances. Plus, at that point it’s your choice to go deeper with your advisor or insurance broker. They can even use other insurance calculation tools to be more precise.
Insurance Rate (Ir) is another key indicator of your current financial wellness. It’s valuable to know this score right now. It’s also important to monitor the score over time. This will help you decide what insurance you may need to protect you and yours.
Ir is one of the key elements in building Financial Scorecards for Federal Agent retirements. Charles Michael Financial serves Federal Agents. It’s the ONLY registered financial planning firm in the nation built specifically for that purpose. We are customized to you. Our cutting edge software captures all the items that go into a Ir score. This is a huge win for our Federal Agent financial planning clients. We even use this software in our MoneyArmor™ Membership coaching platform.
What do you use to calculate your Insurance Rate (Ir)? Advanced financial software or the back of a bar napkin? Either way, get an accurate Ir score so you can get better oriented to your money!
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